Dongfang Zirconium (002167): Zirconium mines put into operation to reduce costs, high-end zirconium business volume still needs time

Dongfang Zirconium (002167): Zirconium mines put into operation to reduce costs, high-end zirconium business volume still needs time

Operating income for the first quarter of 20191.

03 ten percent, -27.

55%, mainly due to the contraction of zirconium ore, 北京桑拿洗浴保健 zirconyl oxychloride and other businesses.

The net profit attributable to the mother in the first quarter was RMB 1.91 million, and the annual profit was -85.

35%, mainly due to the shrinking business volume has led to an increase in profit.

Net cash flow from operating activities in the first quarter was -22.6 million yuan, mainly due to an increase in accounts receivable.

The company’s stock company Image Zirconium Mine was put into production at the end of 2018, and the self-sufficiency rate of zircon sand increased.

The company holds 25 in the subsidiary Image.

45%, the annual output of zircon sand is expected to be 4 indicators, and the company’s zircon sand self-sufficiency rate will increase to 25.

45%, product costs will decrease.

The announcement at the end of 2018 plans to issue no more than 11.

390,000 yuan to build three major projects.

1. Construction of an industrialization project with an annual output of 18 million zirconia ceramic mobile phone backplanes, with an investment of 11.

80,000 yuan, invested in fundraising 8.

800 million; 2. Construction project with an annual output of 1,000 tons of zirconia ceramic beads, investment 1.

560,000 yuan, invested in raising funds1.

37 ppm; 3. Industrialization project of zirconia ceramic powder for surgical implants, total investment 1.

380,000 yuan, invested in raising funds1.

2.2 billion.

Zircon sand faucet joint production reduction and price increase, zircon sand price is expected to maintain high.

Zircon sand’s three major leaders Iluka, Tronox and Rio Tinto have a global market share of 60%. In 2017, Iluka and Rio Tinto reduced their production by 16 in total.

9 Quartz zircon sand, driving the price of zircon sand continues to rise, the supply and demand pattern is stable, it is expected that the price of zircon sand will remain stable in the long term.

Adjusted earnings forecast, the company’s rating was downgraded from overweight to neutral rating.

The company’s future profit growth mainly comes from the operation of image mines, the gradual volume of nuclear-grade zirconium and downstream mobile phone ceramic panels. The prices of zircon sands for 2019-2021 will be adjusted to 1,550 USD / ton, 1,550 USD / ton, and 1,550 USD / ton (originallyIt is estimated that the average price of zircon sand in 2017-2019 will be US $ 1,100 / ton, US $ 1,500 / ton, and US $ 1,500 / ton), taking into account that the revenue of zirconium ore business in 2019-2021 will shrink sharply to 1.

2.4 billion, 1.

4.4 billion, 1.

RMB 650,000 (Originally predicted that the zirconium mine business revenue in 2019 will be 3.

At the same time, the output of businesses such as zirconium oxychloride decreased due to the decline in demand. We adjusted our profit forecast and estimated that the company’s net profit attributable to its mothers will be zero in 2019-2021.

3.7 billion, 0.

7.2 billion, 1.

16 ppm (Originally, the net profit attributable to mothers for 2017-2019 was 0.

4.9 billion, 2.

2.1 billion, 3.

1.8 billion), the corresponding PE is 129 times, 64 times, 41 times respectively. Considering the stable price of nickel enamel in the next six months, the company’s ceramic cover plates, nuclear-grade zirconium and other high-end zirconium materials business will take time. It is expected that in the near futureThe company has been stable for 6 months, and its rating has been downgraded from overweight to neutral.

Risk warning: Zircon sand price drops; picture mine output is expected to be lower